STOCKS NEWS SINGAPORE-DBS upgrades CDL Hospitality to 'buy'

DBS Vickers upgraded CDL Hospitality Trusts to
'buy' from 'hold' and raised its target price to S$2.11 from
S$2.01, citing benefits from its acquisition of a resort in
Maldives.

By 0341 GMT, units of CDL Hospitality Trust were up 1.8
percent at S$1.98. The units have gained 5.3 percent since the
start of the year, compared to the FTSE ST Real Estate
Industrial Trust's 1 percent gain.

CDL Hospitality said it entered into an agreement with
Banyan Tree Holdings Ltd to buy Angsana Velavaru in
Maldives, which it will lease back to the operator for 10 years.

DBS said this will give the trust exposure to the robust
growth in Maldives' hospitality market, supported by growing
popularity among Chinese tourists.

"While this is different from its current portfolio of
largely city-hotels, we believe that the merits of this deal
overweigh potential risks," said DBS in a note.

The 10-year lease has rental payments pegged to gross
operating profits and incentives motivates the operator to
achieve the highest possible returns for the property, DBS said.